Michigan property taxes have a twist that catches new investors: when you buy, the taxable value uncaps and resets, and rentals lose the principal residence exemption. In Detroit, where the city tax rate is high, that can reshape the DSCR.
In short: LendingStreet offers jumbo DSCR loans of about $1.5M to $5M+ in metro Detroit, qualified on rent with no W-2s or tax returns. Large files here include 5 to 8 unit buildings in Midtown, Corktown and Woodbridge, high-end homes in Birmingham and Bloomfield Hills, and portfolios. Michigan's uncapping on sale and Detroit's rental certificate of compliance are the two local items to check first.
In the city, Midtown, Corktown, Woodbridge and Lafayette Park have small apartment buildings and renovated homes near Wayne State, the hospitals and downtown employers. Palmer Woods, Sherwood Forest, Boston-Edison and Indian Village have large historic homes.
In the suburbs, Birmingham, Bloomfield Hills, Royal Oak and Ferndale in Oakland County have higher-value homes and small buildings. Portfolios of single-family rentals are common in Detroit's northwest side, Warren and other Macomb County communities.
| Property | Areas | Check |
|---|---|---|
| 5 to 8 unit building | Midtown, Corktown, Woodbridge | City rental certificate, tax rate |
| Historic large home | Palmer Woods, Boston-Edison, Indian Village | Comparable leases, system ages |
| Suburban home | Birmingham, Bloomfield Hills, Royal Oak | Uncapped taxable value |
At LendingStreet, jumbo DSCR financing generally means a loan of about $1.5M to $5M+ on a non-owner-occupied rental with 1 to 8 units. You can use it to buy, to refinance into better terms, or to pull cash out.
The file is underwritten on the rent: monthly rent divided by principal, interest, taxes, insurance and any HOA dues. Most programs want that ratio at 1.0x or better, with a 620 minimum credit score and no personal income documents. LLCs can borrow, and 30-year terms are available. The leverage ceiling of 80% LTV on a purchase and 75% on cash-out tends to drop as the balance rises; it varies by program.
Michigan caps annual increases in taxable value while one owner holds a property, but on sale the taxable value uncaps and resets to the state equalized value. Rentals also do not get the principal residence exemption, so they pay additional school operating millage. The seller's bill is often far lower than yours will be.
Detroit's millage is among the highest in Michigan. Michigan also charges state and county transfer taxes on sales, usually paid by the seller. Budget on the uncapped, non-homestead bill.
Some newer or renovated Detroit buildings carry tax abatements, such as Neighborhood Enterprise Zone certificates, that lower the bill for a set period. Ask how many years remain, and test the ratio on the full tax as well so the payment jump does not surprise you.
This example is illustrative and not a quote. Consider a 5 to 8 unit building. An investor buys a renovated eight-unit building in Midtown for $2,000,000, leased to hospital and university staff. Rent totals $14,400 a month, with taxes estimated at $2,900 a month and insurance at $900.
Borrowing $1,500,000, which is 75% LTV, gives estimated principal and interest near $10,360 and a full payment near $14,160: a DSCR of about 1.02x. Borrowing $1,300,000 at 65% LTV gives estimated principal and interest near $8,979, a payment near $12,779 and a DSCR of about 1.13x.
Detroit's tax rate is a large share of the payment here. Coverage barely clears 1.0x at 75% LTV and improves with a smaller loan.
| Item | 75% LTV | 65% LTV |
|---|---|---|
| Loan amount | $1,500,000 | $1,300,000 |
| Estimated principal and interest | $10,360 | $8,979 |
| Property taxes | $2,900 | $2,900 |
| Insurance | $900 | $900 |
| Total monthly payment | $14,160 | $12,779 |
| Monthly rent | $14,400 | $14,400 |
| DSCR | About 1.02x | About 1.13x |
Many Detroit buildings are a century old, with brick masonry, older boilers and aging plumbing. Insurers ask for system ages and updates. Cold winters and freeze-thaw cycles add wear, and heavy summer storms have caused widespread basement flooding in parts of the city and Wayne County in recent years, so ask about backflow valves and past water claims.
Detroit requires rental properties to register and obtain a certificate of compliance, which includes an inspection and lead clearance for older units. Tenants in non-compliant rentals may be able to escrow rent, so make sure the certificate is current.
Suburbs have their own rental rules. Royal Oak, Ferndale, Warren and many other communities require rental registration or inspections, and some inspect at each tenant change. On a portfolio, check every city involved.
Most jumbo files here run on 12-month leases. Short-term rentals are regulated locally; Detroit and several suburbs restrict or license them, so do not count on nightly income without confirming the rules.
Metro Detroit has true high-value homes in Oakland County, but many jumbo requests in the city are buildings or portfolios.
Large balances get more scrutiny. Reserve requirements are often higher, the appraisal review is more detailed and some programs ask for a second appraisal. Comparable sales and comparable leases can be thin at the top of a market, so be ready to support both value and rent.
If the ratio comes up short, the usual fixes are a larger down payment, a different loan amount or a sub-1.0 DSCR program where one fits.
On a cash-out refinance, maximum LTV is up to 75% and often lower on a big balance, and how long you must own the property first varies by program. Rate-and-term refinances can go up to 80% LTV on some programs.
Gather these before you ask for terms; a complete package gets a faster answer.
Our investor loans are business-purpose loans on non-owner-occupied property. See our Michigan jumbo DSCR page for statewide context.
Share the address, the rent roll or lease, the value and your target loan amount. LendingStreet will size the loan against realistic carrying costs and show how coverage changes with leverage. Get a quote through the form below or call (877) 298-1001.
On sale, taxable value resets to the state equalized value, so taxes often rise.
There is no stated maximum on our DSCR programs. Jumbo loans commonly run from about $1.5M to $5M+, with leverage and reserves set by program and by the size of the loan.
Yes. Rentals must register and pass inspection, including lead clearance for older units.
Yes, in the sense that no W-2s or tax returns are required. The property's rent has to cover the full payment, and credit, reserves and funds to close are still verified.
Rentals do not get the principal residence exemption, so they pay extra school operating millage.
No, but it is common and fully allowed. If you use one, we will need the formation documents and operating agreement, and you will typically sign for the loan personally.
No. Our investor loans are business-purpose loans on non-owner-occupied property. The home must be held as a rental.
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